EXHIBIT 10 (B)



                              EMPLOYMENT AGREEMENT



                  This EMPLOYMENT  AGREEMENT  ("Agreement")  is made and entered
into as of the 1st day of July, 2003, BY AND BETWEEN WARRANTECH  CORPORATION,  a
corporation  organized under the laws of the State of Delaware (the  "Company"),
and JOEL SAN ANTONIO (the "Executive").

                                   WITNESSETH:

                  WHEREAS,   the   Executive  has  been   instrumental   in  the
development  of the  Company  since its  inception  and the  Company  desires to
continue the services of the Executive; and

                  WHEREAS,  the  parties  are  desirous  of  entering  into this
Agreement  in order to  ensure  the  Company  of the  valuable  services  of the
Executive pursuant to the terms and conditions contained herein;

                  NOW,  THEREFORE,  in  consideration of the premises and mutual
covenants  contained herein and for other good and valuable  consideration,  the
receipt and sufficiency of which are hereby mutually  acknowledged,  the parties
hereby agree as follows:

1.       EMPLOYMENT CONDITIONS

           (a) Effective upon the commencement of the Term hereof (as defined in
Section 2), the Company  hereby  employs the Executive as its Chairman and Chief
Executive Officer and the Executive hereby accepts such employment, on the terms
and conditions  hereinafter set forth. As Chairman and Chief Executive  Officer,
the  Executive  shall report only to the Board of  Directors of the Company.  In
addition,  for as long as the  Executive  shall be employed by the Company,  the
Executive  shall be  nominated  for  election to the Board of  Directors  of the
Company, and the Company shall use its best efforts to cause the election of the
Executive as Director. Each of the parties hereto agrees that the failure of the
Executive  to be duly and validly  elected as a Director  (for any reason  other
than  refusal of the  Executive  to stand for  election or  re-election)  or any
removal of the Executive as a Director,  shall  constitute a material  breach of
this Agreement by the Company.

2.       TERM

         The initial Term of the Executive's  engagement hereunder (the "Initial
Term")  shall  commence as of July 1, 2003 (the  "Commencement  Date") and shall
terminate  on June 30,  2008.  Upon the  expiration  of the Initial  Term,  this
Agreement shall  automatically renew for successive periods of one-year (each, a
"Renewal Term" and collectively with the Initial Term, the "Term") unless either
party shall give the other written notice of  non-renewal  not less than 90 days
prior to the expiration of the Initial Term or any Renewal Term. The Executive's
base salary  under any Renewal Term shall be not less than the final base salary
in effect at the end of the prior term.



3.       DUTIES OF EXECUTIVE

         (a) The Executive shall be the Chief  Executive  Officer of the Company
(and any and all of its  subsidiaries) and shall perform the services and duties
attendant to such  position and attendant to the office of Chairman as set forth
in this Agreement or in the By-Laws of the Company, subject to the direction and


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supervision  of the Board of  Directors  of the  Company.  As Chairman and Chief
Executive  Officer of the Company,  the Executive shall report only to the Board
of  Directors of the Company,  and shall have powers and  authority  superior to
those of any officer or employee of the Company or any subsidiary thereof.

         (b)  Anything  contained  in  Section  3 (a)  hereof  or in  any  other
provision of this  Agreement to the contrary  notwithstanding,  nothing shall be
construed  to limit  the  ability  of the  Executive  to serve on the  Boards of
Directors  or as  Chairman  of  such  other  corporations,  trade  associations,
charitable   organizations  or  other  entities  as  the  Executive  shall  from
time-to-time  deem  appropriate,  and to engage in such other  activities as the
Executive shall deem not to be in conflict with his duties to the Company.

4.       COMPENSATION

         (a)  Base  Annual  Salary.  Subject  to any  other  provision  of  this
Agreement,  the  Executive  shall  receive a base annual salary in the amount of
$595,000 per annum (which amount shall be payable  effective as of July 1, 2003)
(the "Base Salary Amount"), payable in equal bi-weekly payments (less applicable
withholding  taxes)  in  accordance  with the  usual  payroll  practices  of the
Company.

         (b) Cash  Incentive  Bonus.  The Executive  shall be entitled to a cash
incentive  bonus in an amount  equal to two percent  (2%) of the  after-tax  net
income  of  the  Company,  determined  in  accordance  with  generally  accepted
accounting  principles  ("GAAP").  The  calculation  and  distribution  of  such
incentive  bonus amount shall be made  quarterly,  within  forty-five  (45) days
after  the  conclusion  of  each  calendar   quarter.   Such   calculations  and
distributions  shall be cumulative within each fiscal year of the Company,  such
that if at the  conclusion  of any fiscal year it is  determined  that the bonus
award previously distributed hereunder exceeds (or falls short of) the amount to
which the Executive  shall be entitled,  the Company shall  promptly  notify the
Executive  of the amount of such excess (or  arrearage).  The amount of any such
arrearage  shall be paid by the Company to the  Executive in a lump sum,  within
ten (10) days  following  the  computation  of such  amount.  The amount of such
excess  payment,  if any,  shall be refunded by the  Executive  to the  Company,
provided, however, that such repayment shall be accomplished by reducing each of
the four quarterly  incentive bonus payments in the succeeding year by an amount
equal to twenty-five (25%) percent of such overpayment. Notwithstanding anything
contained herein to the contrary,  in any year during or after which a Change in
Control (as  hereinafter  defined) shall have  occurred,  the amount of the cash
incentive  bonus payable  pursuant to this paragraph 4(b) shall not be less than
the amount of the cash  incentive  bonus paid during the  immediately  preceding
year.



5.       EMPLOYEE BENEFITS

           (a) In addition to the compensation  and other benefits  provided for
elsewhere in this Agreement,  the Executive shall be entitled to eight (8) weeks
of paid  vacation  during  each  year,  as well as to  health,  life  insurance,
pension,  supplemental  pension,  savings,  stock award,  stock option and other
employment benefits which are provided to other executive officers and employees
of the Company,  to be  reimbursed  by the Company for  ordinary  and  necessary
business  expenses  incurred by the Executive and to participate in all employee
benefit  plans of the Company as in effect on the date hereof  and/or as adopted
or modified  from  time-to-time  after the date  hereof.  The Company  shall not
terminate  any such  employee  benefits or employee  benefit  plans which are in
effect on the date hereof.

           (b) In addition to any other life  insurance  maintained  pursuant to
paragraph  5(a)  above,  the  Company  shall,  to the extent  permitted  by law,
continue to maintain in full force and effect for the benefit of the  Executive,
the "split dollar" life insurance  arrangement  presently in effect with respect
to the two policies  insuring the Executive  having policy  numbers  1042887 and
1026492.


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           (c) In  addition  to  any  other  insurance  maintained  pursuant  to
paragraph 5(a) above,  the Company shall maintain,  in full and effect,  for the
benefit of the Executive,  long term disability  insurance,  on terms reasonably
satisfactory to the Executive.

           (d) The  Company  shall  provide  the  Executive  with an  automobile
expense allowance of not less than $12,000 per year.

6.       COUNSEL FEES AND INDEMNIFICATION

         The Company  shall pay, or  reimburse  to the  Executive,  the fees and
expenses of personal  counsel for their  professional  services  rendered to the
Executive in connection with this  Employment  Agreement and any other agreement
or benefit  plan  entered  into or adopted in  connection  herewith  and matters
related hereto and thereto,  including in connection with any enforcement hereof
and thereof.  Without limiting the foregoing,  in the event that (i) the Company
terminates, or seeks to terminate this Agreement,  alleging as justification for
such  termination  "good  cause" as  specified  in Section  8(b)  hereof and the
Executive  disputes  such  termination  or  attempted  termination,  or (ii) the
Executive elects to terminate this Agreement pursuant to Section 8(c) hereof and
the  Company  disputes  its  obligations  pursuant  to  Section  8 or any  other
provision  of this  Agreement,  the  Company  shall  pay,  or  reimburse  to the
Executive,  all  reasonable  costs  incurred by the  Executive in such  dispute,
including attorneys' fees and costs.

7.       REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY

           (a) The Company  hereby  represents and warrants to, and agrees with,
the Executive as follows:

                  (i) the  Executive  is and shall  continue  to be covered  and
        insured up to the maximum  limits  provided by all  insurance  which the
        Company  maintains  to indemnify  its  directors  and  officers  (and to
        indemnify the Company for any obligations which it incurs as a result of
        its undertaking to indemnify its officers and directors);

                  (ii) that the Company will  continue to maintain in full force
        and effect  such  insurance,  at not less than its  present  limits,  in
        effect  throughout  the  Term  of this  Agreement  (or  any  renewal  or
        continuation hereof);

                  (iii)  this  Agreement,  and each of the terms and  provisions
        hereof,  including,  without limitation the undertakings with respect to
        payment,  indemnification  and  maintenance  of  insurance  set forth in
        Sections 6 and 7 hereof,  do not violate or conflict with any provisions
        of the Certificate of Incorporation  and Bylaws of the Company,  (B) any
        agreement by which the Company is bound,  or (C) any  federal,  state or
        local law, rule,  regulation or judicial order;  this Agreement has been
        duly and validly authorized,  executed and delivered by the Company, and
        is a legal,  valid and binding  obligation  of the Company,  enforceable
        against the Company in accordance with its terms;

                  (iv) the  Company  has all power and  authority  necessary  to
        enter into this Agreement in accordance with its terms;

                  (v) this Agreement, and the employment of the Executive by the
        Company  have  been  duly  approved  by the  Board of  Directors  of the
        Company;

                  (vi) during the Term  hereof,  the Company will not change the
        corporate title of the Executive or alter or diminish the powers, duties
        and  authority  of the  Executive  in his position as Chairman and Chief
        Executive Officer of the Company (or any subsidiary of the Company), nor
        will the Company change by more than twenty-five (25) miles the location
        of the offices in which Executive's  services are to be performed (i.e.,
        Stamford,  Connecticut), or take any other action which would constitute
        "Good  Reason" as defined in Section 8 (c) hereof if such action were to
        occur  following  a "Change  in  Control"  as  defined  in Section 8 (c)
        hereof;


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                  (vii)  except  as  otherwise  prohibited  by  law  or  by  the
        Company's  Certificate of Incorporation  and By-laws,  the Company shall
        indemnify  and  hold  harmless  the  Executive  to  the  fullest  extent
        permitted by  applicable  law,  and,  shall advance to the Executive the
        reasonable  costs and  expenses,  including,  but not  limited  to,  the
        reasonable  attorneys  fees of  Executive's  attorneys,  incurred by the
        Executive in connection with investigating and/or defending any claim or
        other  matter  covered  by  the  Company's  indemnification  obligation,
        subject to receiving a written  undertaking  from the Executive to repay
        such  amounts if and to the  extent  that a court or other  tribunal  of
        competent  jurisdiction  subsequently  determines that the Executive was
        not  entitled  to  indemnification  hereunder.  To the  extent  that the
        Company's   Certificate  of  Incorporation,   By-laws,   resolutions  of
        Company's Board of Directors or  stockholders,  or other corporate acts,
        agreements or instruments of the Company,  each as in effect on the date
        hereof,    confer    additional   or   specific   rights   relating   to
        indemnification,  advancement  of expenses of  directors  and  officers,
        agents or others,  the Executive  shall  continue to be entitled to such
        rights, which rights may not be diminished by subsequent modification or
        amendment; and

                  (viii) each of the persons  executing  this  Agreement  hereby
        acknowledges  and agrees  that,  in entering  into this  Agreement,  the
        Executive has relied on each of the  representations  and warranties and
        agreements of the Company contained herein and failure of the Company to
        comply  with or  perform  any of  such  representations,  warranties  or
        agreements  shall  constitute the material breach by the Company of this
        Agreement.

8.       TERMINATION

        This Agreement may be terminated only as follows:

           (a)  Termination  by the Company  Other than for Good  Cause.  If the
Company shall  terminate the  employment of the Executive  during the Term other
than for "good cause",  as defined herein,  then the Executive shall be entitled
to receive the following:

                  (i)  payment of cash in an amount  equal to the greater of (A)
        the Base  Salary  Amount (as in effect on the date of such  termination)
        for the remainder of the Term or (B) three year's Base Salary Amount (as
        in effect on the date of such termination);

                  (ii) the bonus amount payable pursuant to Section 4(b) hereof,
        which amount shall be pro rated in the case of any partial period; and

                  (iii) any and all unvested  stock  options,  restricted  stock
        awards or similar  items  subject to future  vesting  shall  immediately
        become  100%  vested  without  any  further  action  on the  part of the
        Executive.

           (b) Termination by the Company for Good Cause.  Except as provided in
Section 8 (d) below, this Agreement may only be terminated by the Company,  upon
written notice to the Executive,  for "good cause" as hereinafter  defined.  For
purposes of this Section 8(b) "good cause" shall mean the willful and  continued
failure of the  Executive  to perform his duties or the willful  engaging by the
Executive in illegal  conduct or gross  misconduct  materially  injurious to the
Company.  If the Company  desires to terminate  the  employment of the Executive
pursuant  to this  Section  8(b) the  Company  shall  first  send  notice to the
Executive describing the action constituting the act of breach or default and on
receipt  thereof the Executive shall have thirty (30) days in which to cure such
breach or default.  Upon  termination in accordance  with the provisions of this
Section  8 (b) the  Company  shall  be  obligated  to pay to the  Executive  the
annualized  Base Salary Amount only through the period ending on the last day of
the month in which  such  termination  occurs,  plus such  other  amounts as are
payable to the Executive pursuant to this Agreement and which have accrued as of
the  last day of the  month in which  such  termination  occurs  (including  the
pro-rating of amounts in respect of any partial period).


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           (c) Termination by the Executive by Resignation upon Breach or Change
in Control.

         (i) This  Agreement may be terminated  by the  Executive,  upon written
notice to the Company,

                (A) for breach by the Company of any of the terms or  provisions
                hereof or any other  agreement  or benefit  plan entered into or
                adopted in connection herewith,

                (B)  during  the  "Window  Period"  (as   hereinafter   defined)
                following a "Change in  Control"  of the Company as  hereinafter
                defined, or

                (C)  upon  the  occurrence  of  "Good  Reason"  (as  hereinafter
                defined)  following  a "Change  in  Control"  of the  Company as
                hereinafter defined.

Upon any such  termination in accordance  with this Section 8 (c), the Executive
shall be entitled to receive  payments in the same amounts and  acceleration  of
vesting or other benefit as would be payable or would occur upon  termination of
the  Executive by the Company other than for "good cause" as provided in Section
8(a) hereof.

         (ii) For  purposes  of this  Agreement,  a "Change in  Control"  of the
Company shall mean any of the following events:

                              (A) An  acquisition  (whether  directly  from  the
                Company or  otherwise)  of any voting  securities of the Company
                (the "Voting Securities") by any "Person" (as the term person is
                used for purposes of Section 13 (d) or 14 (d) of the  Securities
                and  Exchange Act of 1934,  as amended (the "1934 Act"))  (other
                than the Executive or an entity  controlled  by the  Executive),
                immediately  after which such Person has "Beneficial  Ownership"
                (within  the  meaning of Rule 13d-3  promulgated  under the 1934
                Act) of forty percent (40%) or more of the combined voting power
                of the Company's then outstanding Voting Securities.

                              (B) The  individuals  who, as of the date  hereof,
                are members of the Board (the "Incumbent Board"),  cease for any
                reason to  constitute at least sixty percent (60%) of the Board;
                provided,  however,  that if the  election,  or  nomination  for
                election by the Company's stockholders,  of any new director was
                approved  by a vote  of at  least  sixty  percent  (60%)  of the
                Incumbent  Board,  such new director shall, for purposes of this
                Agreement,  be considered  as a member of the  Incumbent  Board;
                provided,   further,   however,  that  no  individual  shall  be
                considered a member of the  Incumbent  Board if such  individual
                initially  assumed  office  as a result  of  either an actual or
                threatened  "Election  Contest"  (as  described  in Rule  14a-11
                promulgated  under the 1934 Act) or other  actual or  threatened
                solicitation  of proxies or consents by or on behalf of a Person
                other than the Board (a "Proxy Contest")  including by reason of
                any agreement  intended to avoid or settle any Election  Contest
                or Proxy Contest; or

                              (C)   Approval  by  the  Board  of   Directors  or
                stockholders of the Company,  or execution by the Company of any
                agreement with respect to, or the consummation of:

                                       (1)   A    merger,    consolidation    or
                             reorganization involving the Company;

                                       (2) A liquidation  or  dissolution  of or
                             appointment    of   a   receiver,    rehabilitator,
                             conservator or similar person for, the Company; or

                                       (3) An  agreement  for the  sale or other
                             disposition  of  all  or  substantially  all of the
                             assets of the  Company to any Person  (other than a
                             transfer to a Subsidiary).

                              (D) Any other  change in "control" of the Company.
                For purposes of the  immediately  preceding  sentence,  the term
                "control" shall have the meaning  ascribed  thereto  pursuant to
                Rule 405 of the  Rules and  Regulations  of the  Securities  and
                Exchange Commission  promulgated  pursuant to the Securities Act
                of 1933, as amended.


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                    (iii)  Notwithstanding  anything contained in this Agreement
to the contrary,  if the Executive's  employment is terminated prior to a Change
in Control and the Executive  reasonably  demonstrates that such termination (i)
was at the  request of a third party who has  indicated  an  intention  or taken
steps reasonably  calculated to effect a Change in Control and who effectuates a
Change in Control (a "Third  Party") or (ii)  otherwise  occurred in  connection
with, or in anticipation of, a Change in Control which actually occurs, then for
all purposes of this Agreement,  the date of a Change in Control with respect to
the  Executive  shall  mean  the  date  immediately  prior  to the  date of such
termination of the Executive's employment.

                    (iv) In order to provide the Executive  with an incentive to
remain with the  Company for an  appropriate  period of  transition  following a
Change in Control of the  Company,  for purposes of this  Agreement  the "Window
Period"  shall be the ninety (90) day period  beginning on the date which is six
(6) months  after the date of any Change in  Control of the  Company;  provided,
however,  that if any such Change in Control shall occur within the last six (6)
months  of the  Term of this  Agreement,  the  Window  Period  shall be the last
forty-five  (45) days of the Term hereof (or such lesser  period as shall remain
in the Term hereof  following  such Change in Control) ; and provided,  further,
that if any such Change in Control shall occur during the last six (6) months of
the Term of this Agreement, unless the Executive shall have given written notice
to the contrary,  the Executive  shall without further action  automatically  be
deemed to have given the written notice  specified in Section  8(c)(i) hereof on
the last day of the Term hereof  (unless such notice shall have been  previously
given) and shall be entitled to receive the payments specified in such Section 8
(c) (i).

                    (v) For purposes of this Agreement, "Good Reason" shall mean
the  occurrence  after a Change in Control  of any of the  events or  conditions
described in subsections (A) through (G) hereof:

                (A) a change  in the  Executive's  status,  title,  position  or
                responsibilities  (including reporting  responsibilities) which,
                in the Executive's  reasonable  judgment,  represents an adverse
                change from his status,  title,  position or responsibilities as
                in effect at any time within ninety (90) days preceding the date
                of a Change in Control or at any time thereafter; the assignment
                to the Executive of any duties or responsibilities which, in the
                Executive's  reasonable  judgment,  are  inconsistent  with  his
                status,  title, position or responsibilities as in effect at any
                time within  ninety (90) days  preceding the date of a Change in
                Control  or at  any  time  thereafter;  or  any  removal  of the
                Executive  from or failure to reappoint or reelect him to any of
                such offices or positions;

                (B) any failure to award the  Executive  bonus  payments  and/or
                increases in Base Annual Salary in a manner  consistent with the
                practice of the Company prior to any such Change in Control;

                (C) the  Company's  requiring  the  Executive to be based at any
                place  outside  a 25-mile  radius  from  Stamford,  Connecticut,
                except for reasonably  required travel on the Company's business
                (including   such  travel  to  Bedford,   Texas)  which  is  not
                materially  greater than such travel  requirements  prior to the
                Change in Control;

                (D)  the  failure  by the  Company  to (a)  continue  in  effect
                (without    reduction   in   benefit   level,    and/or   reward
                opportunities)  any material  compensation  or employee  benefit
                plan in which the Executive was participating at any time within
                ninety (90) days preceding the date of a Change in Control or at
                any  time   thereafter,   or  (b)  provide  the  Executive  with
                compensation and benefits, in the aggregate,  at least equal (in
                terms of benefit  levels and/or reward  opportunities)  to those
                provided for under each other employee benefit plan, program and
                practice in which the  Executive was  participating  at any time
                within  ninety  (90)  days  preceding  the date of a  Change  in
                Control or at any time thereafter;

                (E) the  insolvency  or the filing (by any party,  including the
                Company) of a petition for  bankruptcy or similar  insolvency of
                the Company,  which petition is not dismissed  within sixty (60)
                days;


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                (F) any material  breach by the Company of any provision of this
                Agreement;

                (G) any purported termination of the Executive's  employment for
                "good cause" by the Company which does not comply with the terms
                of Section 8(b) hereof.

         (d) Termination by the Company upon  Disability of the Executive.  This
Agreement may, at the option of the Company, be terminated by the Company,  upon
thirty  (30)  day's  prior  written  notice to the  Executive  (or his  personal
representative),  upon the Disability of the Executive as  hereinafter  defined.
For  purposes of this  Section 8 (d)  "Disability"  shall mean if the  Executive
shall become physically or mentally disabled,  whether totally or partially,  so
that he is unable to perform  substantially all of his services  hereunder for a
period  of  twelve  (12)  consecutive  months.  Upon  any  such  termination  in
accordance  with this Section 8 (d), the Executive  shall be entitled to receive
payments of Base Salary  Amount (as in effect on the date of such  termination),
together with such  increases as would be  applicable  pursuant to Section 4 (a)
hereof  for a period of  twelve  (12)  months  from the  effective  date of such
termination. In addition, the Executive shall be entitled to such other benefits
as would be available  upon  termination  of the  Executive by the Company other
than for "good cause" as provided in subsections (ii) and (iii) of Section 8 (a)
hereof.  Notwithstanding  anything  contained  herein to the contrary,  the cash
payment  pursuant  to which the  Executive  shall be  entitled  pursuant to this
Section 8 (d) during the  twelve-month  period  following  any such  termination
shall be reduced,  dollar-for-dollar  by the amount of any disability  insurance
payment  received by the Executive during such period pursuant to any disability
insurance policy, the entire premium of which was paid for by the Company.

           (e)  Termination  by the Company  upon Death of the  Executive.  This
Agreement shall terminate upon death of the Executive. Upon any such termination
in  accordance  with  this  Section  8  (e),  the  Executive  (or  his  personal
representative)  shall be entitled to receive payment of cash in an amount equal
to  one  year's  Base  Salary  Amount  (as in  effect  upon  the  date  of  such
termination)  plus  the pro  rata  portion  of any  bonus  payable  pursuant  to
paragraph 4 (b) hereof through the date of such termination.

           (f)  Payment  Terms.  Payment of any  amounts to which the  Executive
shall be entitled  pursuant to the provisions of this Section 8 shall be made no
later than ten (10) days following receipt of notice of termination or the event
giving rise to such termination.  Any amounts payable pursuant to this Section 8
which are not made within the period  specified in this Section 8 (f) shall bear
interest  at a rate  equal  to the  lesser  of (i)  the  maximum  interest  rate
allowable  pursuant to applicable law or (ii) five points above the "prime rate"
of interest as published from  time-to-time  in the Eastern  Edition of the Wall
Street Journal.

           (g)  Benefits.  In the  event  the  Executive's  employment  with the
Company is terminated for any reason prior to the end of the Term, the Executive
and his  dependents,  if any, will continue to  participate  in any group health
plan  sponsored by the Company in which the Executive was  participating  on the
date of such termination, at no cost to the Executive or his dependents, for the
remainder of the Term.  Thereafter,  the Executive and his  dependents,  if any,
shall be entitled to elect  continuation  health coverage under Section 4980B of
the  Internal  Revenue Code of 1986,  as amended,  or any  successor  provisions
thereto,  to the extent permitted by applicable law. In addition to any payments
to which the  Executive  may be  entitled  upon  termination  of his  Employment
pursuant to any provision of this Agreement,  the Executive shall be entitled to
any benefits under any life insurance,  pension,  supplemental pension, savings,
or other employee  benefit plan in which the Executive was  participating on the
date of any such termination.

9.       LIMITATION ON PAYMENTS

           (a) In the event that  Deloitte & Touche,  LLP, or any  successor tax
accountants  to the  Company  (the  "Auditors")  determine  that any  payment or
distribution by the Company to or for the benefit of the Executive, whether paid
or payable  (or  distributed  or  distributable)  pursuant  to the terms of this
Agreement or otherwise (a "Payment"),  would be nondeductible by the Company for
federal income tax purposes because of section 280G of the Internal Revenue Code
of 1986,  as amended  (the  "Code"),  then the  aggregate  present  value of the


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<PAGE>

amounts payable or distributable to or for the benefit of the Executive pursuant
to this Agreement  (the  "Agreement  Payments")  shall be reduced (but not below
zero) to the Reduced Amount. For purposes of this Section 9, the "Reduced Amount
shall be an amount  expressed in present  value which  maximizes  the  aggregate
present  value  of  Agreement   Payments  without  causing  any  Payment  to  be
nondeductible by the Company because of section 280G of the Code.

           (b) If the Auditors determine that any Payment would be nondeductible
by the  Company  because of section  280G of the Code,  then the  Company  shall
promptly  give the  Executive  notice to that effect and a copy of the  detailed
calculation thereof and of the Reduced Amount, and the Executive may then elect,
in his sole  discretion,  which and how much of the Agreement  Payments shall be
eliminated  or reduced (as long as after such  election  the  aggregate  present
value of the Agreement  Payments equals the Reduced Amount) and shall advise the
Company in writing of his election  within 10 days of his receipt of notice.  If
no such election is made by the Executive  within such 10-day  period,  then the
Company  may  elect  which  and how  much of the  Agreement  Payments  shall  be
eliminated  or reduced (as long as after such  election  the  aggregate  present
value of the Agreement  Payments equals the Reduced Amount) and shall notify the
Employee  promptly of such  election.  For  purposes of this  Section 9, present
value shall be determined in accordance with section 280G(d)(4) of the Code. All
determinations  made by the Auditors  under this Section 9 shall be binding upon
the  Company  and  the  Executive  and  shall  be  made  within  60  days of the
Executive's termination of employment. As promptly as practicable following such
determination  and  the  elections  hereunder,  the  Company  shall  pay  to  or
distribute to or for the benefit of the  Executive  such amounts as are then due
to him under this  Agreement  and shall  promptly pay to or  distribute  for the
benefit of the  Executive  in the future such amounts as become due to him under
this Agreement.

           c) As a result of the  uncertainty in the application of section 280G
of the Code at the time of the initial  determination by the Auditors hereunder,
it is possible that Agreement  Payments will have been made by the Company which
should  not have  been  made (an  "Overpayment")  or that  additional  Agreement
Payments  which will not have been made by the Company  could have been made (an
"Underpayment"),  consistent  in each case with the  calculation  of the Reduced
Amount hereunder. In the event that the Auditors,  based upon the assertion of a
deficiency by the Internal  Revenue Service against the Company or the Executive
which the Auditors believe has a high probability of success,  determine that an
Overpayment has been made, such Overpayment shall be treated for all purposes as
a loan to the  Executive  which he shall  repay to the  Company,  together  with
interest at the applicable  federal rate provided for in section 7872 (f) (2) of
the Code; provided, however, that no amount shall be payable by the Executive to
the Company if and to the extent that such  payment  would not reduce the amount
which is subject to taxation  under  section 4999 of the Code. In the event that
the Auditors,  based upon controlling precedent,  determine that an Underpayment
has occurred,  such Underpayment shall promptly be paid by the Company to or for
the benefit of the Executive,  together with interest at the applicable  federal
rate provided for in section 7872 (f) (2) (A) of the Code.

10.      WAIVER

         No waiver of any  provision of this  Agreement  shall be effective  and
enforceable  unless set forth in a written  instrument  executed  by the parties
hereto.  No waiver of any provision of this Agreement  shall affect the validity
or  enforceability,  or  constitute  a waiver  of  future  enforcement,  of such
provision or of any other provision of this Agreement.

11.      GOVERNING LAW

           This Agreement  shall in all respects be subject to,  governed by and
construed in accordance with the laws of the State of Connecticut.


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<PAGE>

12.      SEVERABILITY

         The invalidity or  unenforceability  of any provision of this Agreement
shall not in any manner  whatsoever affect the validity or enforceability of any
other provision hereof.  Whenever possible, this Agreement shall be construed to
permit the full  enforcement of each provision  hereof,  and any  declaration of
invalidity  or  unenforceability  with regard to any  provision  hereof shall be
construed to minimize the effect of such declaration.

13.      NOTICES

         All notices  required or  permitted  hereunder  shall be in writing and
shall be  sufficiently  given if: (a) hand  delivered  (in which case the notice
shall be effective upon delivery) ; (b) telecopied, provided that in such case a
copy of such notice shall be concurrently  sent by registered or certified mail,
return  receipt  requested,  postage  prepaid (in which case the notice shall be
effective one day following  dispatch);  (c) delivered by Express Mail,  Federal
Express or other nationally  recognized overnight courier service (in which case
the notice shall be effective  one  business  day  following  dispatch) ; or (d)
delivered or mailed by registered or certified mail,  return receipt  requested,
postage  prepaid  (in  which  case the  notice  shall be  effective  three  days
following dispatch), to the parties at the following addresses and/or telecopier
numbers,  or to such other address or number as a party shall specify by written
notice to the others in accordance with this Section.

                               If to the Company:

                                 Warrantech Corporation
                                 300 Atlantic Street
                                 Stamford, Connecticut 06901
                                 Attn: President
                                 Telecopier No.:  203-327-1587






                                 with a copy to:

                                Ralph A. Siciliano, Esq. Newman, Tannenbaum,
                                Helpern, Syracuse & Hirschtritt, LLP
                                900 Third Avenue
                                New York, New York 10022
                                Telecopier No.:  212-371-1084

                                If to Executive:

                                Joel San Antonio
                                ----------------------
                                ----------------------------


                                with a copy to:

                                Elizabeth Alcorn, Esq.
                                Thelen Reid & Priest LLP
                                875 Third Avenue
                                New York, New York 10022-6225
                                Telecopier No.:  (212) 829-2002




                                       41
<PAGE>



14.      DEATH OR DISABILITY

         In  the  event  of the  death  or  disability  of  the  Executive,  the
Executive,  his estate or his designated  beneficiaries shall be entitled to the
same  compensation,  rights and  benefits as are referred to in Sections 8 and 9
hereof.

15.      BINDING EFFECT

         This Agreement together with any written  amendments  hereto,  shall be
binding  upon and shall  inure to the  benefit of the  parties  hereto and their
respective successors,  assigns, heirs and personal  representatives.  Except as
otherwise  provided  in Section 14 hereof,  this  Agreement  is not  intended to
confer any rights or remedies upon any person or entity other than the Executive
and the Company.


16.      NO MITIGATION OF DAMAGES; NO SET-OFF

         In the event of any termination of this Agreement by either the Company
or the  Executive for any reason,  the  Executive  shall not be required to seek
comparable  employment  so as to  minimize  any  obligation  of the  Company  to
compensate  the  Executive  for any damages that he may suffer by reason of such
termination  or  for  any  severance  or  other  payment.  No  salary  or  other
compensation  received by the Executive in connection with any employment of the
Executive after termination of the Executive's  employment with the Company will
reduce any amounts payable under this Agreement or any agreement entered into in
connection  herewith.  There  shall be no right of  set-off or  counterclaim  on
behalf of the Company, in respect of any claim, debt or obligation,  against any
payments to the Executive, his dependents,  beneficiaries or estate provided for
in this Agreement.

17.      AMENDMENTS

         No provision  of this  Agreement  may be  modified,  altered or amended
except by written agreement executed by all of the parties hereto.

18.      ENTIRE AGREEMENT

         This Agreement and any benefit plans of the Company are intended by the
parties as the final expression of their agreement and intended to be a complete
and exclusive  statement of the  agreements  and  understandings  of the parties
hereto in respect  of the  subject  matter  contained  herein or in such  letter
agreements.  There are no  restrictions,  promises,  warranties or undertakings,
other than those set forth or  referred  to herein or  therein.  This  Agreement
supersedes  all prior  agreements  and  understandings  between the parties with
respect to the subject matter hereof.

19.      HEADINGS

         The various  headings  set forth in this  Agreement  are  inserted  for
reference  purposes only and shall in no way effect the meaning or intent of any
provision hereof.

20.      INTERPRETATION

         It is  expressly  agreed by the  parties  that the  authorship  of this
Agreement  will have no bearing  upon its  interpretation.  Each of the  parties
hereto  acknowledges  and agrees that the terms and provisions of this Agreement
are fair and reasonable and that no such term or provision shall in any event be
deemed a penalty.

21.      COUNTERPARTS

         This Agreement may be executed in  counterparts  each of which shall be
deemed  an  original  but  all of  which  together  shall  constitute  a  single
instrument.


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<PAGE>

22.      DISPUTE RESOLUTION

         At the sole election of the Executive,  any dispute arising pursuant to
this Agreement may be resolved pursuant to an arbitration  proceeding  conducted
by a panel  of three  neutral  arbitrators  in  accordance  with the  commercial
arbitration rules of the American Arbitration Association.  Any such proceedings
will be held in Stamford, Connecticut. Notwithstanding anything contained herein
to the contrary all costs  associated  with such  proceeding  shall borne by the
Company.

23.      COVENANT NOT TO COMPETE UPON ELECTION OF COMPANY

           (a) During the period of 30 days  following  the  termination  of the
employment of the Executive during the Term (other than termination  pursuant to
Section 8 (c) (A) or Section 8 (c) (C) ), the Company shall have the option, but
not the obligation, to deliver to the Executive a written notice of the election
of the Company to invoke the covenant not to compete contained in Section 23 (b)
hereof.

           (b) Upon timely  receipt by the  Executive  of a notice  specified in
Paragraph  23 (a) hereof,  the  Executive  shall not, for a period of two years,
engage in the  business of (i) the  offering of service  contracts  to consumers
through   retailers,   dealers,   distributors   and   manufacturers,   or  (ii)
administering   service   contracts  offered  by  others  to  consumers  through
retailers, dealers, distributors and manufacturers.  Nothing herein shall impair
the ability of the  Executive to engage in any other  activity not  specified in
the immediately  preceding sentence,  including,  without  limitation,  offering
service contracts or administering  service contracts offered to consumers other
than through retailers, dealers, distributors and manufacturers.

           (c) Upon the election of the Company to invoke the provisions of this
Section 23, and  simultaneously  with the submission of the notice  specified in
paragraph  23(a),  the Company shall issue to the Executive One Hundred Thousand
(100,000) shares of Common Stock.

           (d) The  obligations  of the  Executive  under this  Section 23 shall
terminate  upon the breach by the  Company of any  obligation  to the  Executive
pursuant to this Agreement or any other agreement.

         IN WITNESS  WHEREOF,  the Company and Executive have duly executed this
Agreement as of the day and year first written above.

                                          WARRANTECH CORPORATION


                                          By:

                                           /s/Richard Gavino
                                           -----------------
                                          Richard Gavino
                                          Chief Financial Officer


                                          /s/ Joel San Antonio
                                          --------------------
                                          Joel San Antonio





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